According to data from Localbitcoins transactions, Venezuela and Argentina have had a steady increase in buying cryptocurrency mainly driven by their troubled economies and rising inflation.
Argentina
Argentinians are mainly using cryptocurrency to protect their wealth from inflation. In addition to Localbitcoins there are reports that easing regulations could also see and increase in bitcoin ATMs in Argentina in the near future. The number of ATMs is currently only two. However, according to Reuters, this is expected to rise to 30 in the next few months.
Argentina is no stranger to inflation, which while not in the same league as Venezuela is expected to reach 40 percent by the end of the year.
Moreover, the Argentine peso has lost more than 50 percent of its value against the dollar in 2018. This makes it extremely hard for Argentinians to buy outside goods, to leave the country, or to protect their wealth.
Unlike Venezuela that is relatively new to cryptocurrencies, Argentina has a longer history of buying bitcoins, but it looks like the price falling well under $4,000 has encouraged more to start buying Bitcoins in increasing numbers.
Venezuela
Looking at the charts, one of the first things you notice is that bitcoin purchases in Venezuela didn’t really begin in earnest until the second quarter of this year. Since April of 2018, the volume has increased from around 17 million to over 3 billion for the second week of December 2018, where the increase becomes parabolic.
The main reason for this probably a lack of trust, or means to purchase virtual currency. But as the economic situation has worsened and the government devalued the national currency by 95 percent, more and more Venezuelans are looking to shield their wealth.
Despite the fact that most of the world s talking about a bear market and crypto winter as the crypto market crashes, for Venezuelans, it’s still a better option than their national currency. They’ve been using bitcoin to shield their wealth despite the value going down and as the recent spike on Localbitcoins shows, more people are getting in as a lower price makes buying bitcoins more accessible.
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